BILL ANALYSIS Ó
AB 1742
Page 1
Date of Hearing: March 29, 2016
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Susan Bonilla, Chair
AB 1742
(Mark Stone) - As Introduced February 1, 2016
SUBJECT: CalWORKs: eligibility
SUMMARY: Increases the time limit for cash aid to adults
through the California Work Opportunity and Responsibility to
Kids (CalWORKs) program from 48 months to 60 months and
increases the CalWORKs earned income disregard to support
employment.
Specifically, this bill:
1)Increases the time limit on aid for CalWORKs recipient parents
and caretaker relatives from a cumulative total of 48 months
to 60 months, thereby aligning with federal time limits for
the federal Temporary Assistance for Needy Families (TANF)
program.
2)Increases the amount of income disregarded when calculating
CalWORKs eligibility and aid amounts from $225 plus 50% of the
remaining earned income to $450 and 70% of the remaining
AB 1742
Page 2
earned income, as specified.
3)Makes conforming changes to other statutory provisions that
include the current 48-month CalWORKs time limit and provides
that no appropriation shall be made to implement the
provisions of this bill.
EXISTING LAW:
1)Establishes under federal law the Temporary Assistance for
Needy Families (TANF) program to provide aid and
welfare-to-work services to eligible families and, in
California, provides that TANF funds for welfare-to-work
services are administered through the CalWORKs program. (42
U.S.C. 601 et seq., WIC 11200 et seq.)
2)Establishes income, asset and real property limits used to
determine eligibility for the program, including net income
below the Maximum Aid Payment (MAP), based on family size and
county of residence, which is around 40% of the Federal
Poverty Level. (WIC 11150 to 11160, 11450 et seq.)
3)Establishes a 48-month lifetime limit of CalWORKs benefits for
eligible adults, including 24 months during which a recipient
must meet federal work requirements in order to retain
eligibility. (WIC 11454, 11322.85)
4)Requires all individuals over 16 years of age, unless they are
otherwise exempt, to participate in welfare-to-work activities
as a condition of eligibility for CalWORKs. (WIC 11320.3,
11322.6)
5)Establishes the number of weekly hours of welfare-to-work
AB 1742
Page 3
participation necessary to remain eligible for aid, including
requirements for an unemployed parent in a two-parent
assistance unit, as specified. (WIC 11322.8)
6)Defines disability-based unearned income, within the CalWORKs
program, as state disability insurance benefits, private
disability insurance benefits, temporary workers' compensation
benefits, social security disability benefits, and any
veteran's disability compensation. (WIC 11451.5)
7)Defines earned income as gross income received as wages,
salary, employer-provided sick leave benefits, commissions, or
profits from activities such as a business enterprise or
farming in which the recipient is engaged as a self-employed
individual or as an employee. (WIC 11451.5)
8)Exempts the following when calculating a family's income for
the purpose of determining CalWORKs eligibility:
If the family's disability-based unearned income does not
exceed $225
a) All disability-based unearned income, plus any amount of
not otherwise exempt earned income equal to the amount of
the difference between the amount of disability-based
unearned income and $225.
b) Fifty percent of all not otherwise exempt earned income
in excess of the amount applied to the difference between
the amount of disability-based income and $225.
If the family's disability-based unearned income exceeds $225
a) All of the first $225 in disability-based unearned
AB 1742
Page 4
income.
b) Fifty percent of all earned income. (WIC 11451.5)
FISCAL EFFECT: Unknown.
COMMENTS:
CalWORKs: The CalWORKs program provides monthly income
assistance and employment-related services aimed at moving
children out of poverty and helping families meet basic needs.
Federal funding for CalWORKs comes from the TANF block grant.
The average 2016-17 monthly cash grant for a family of three on
CalWORKs (one parent and two children) is $497.35, and the
maximum monthly grant amount for a family of three, if the
family has no other income and lives in a high-cost county, is
$704. According to recent data from the California Department
of Social Services, around 497,000 families rely on CalWORKs,
including over one million children. Nearly 60% of cases
include children under 6 years old.
Maximum grant amounts in high-cost counties of $704 per month
for a family of three, with no other income, means $23.46 per
day, per family, or $7.82 per family member, per day to meet
basic needs, including rent, clothing, utility bills, food, and
anything else a family needs to ensure children can be cared for
at home and safely remain with their families. This grant
amount puts the annual household income at $8,448 per year, or
42% of poverty. Federal Poverty Guidelines for 2016 show that
100% of poverty for a family of three is $20,160 per year.
Welfare-to-Work requirements: Welfare-to-work activities within
AB 1742
Page 5
the CalWORKs program include public or private sector subsidized
or unsubsidized employment; on-the-job training; community
service; secondary school, adult basic education and vocational
education and training when the education is needed for the
recipient to become employed; specific mental health, substance
abuse, or domestic violence services if they are necessary to
obtain or retain employment; and a number of other activities
necessary to assist a recipient in obtaining unsubsidized
employment.
Unless they are exempt, single parent adults must participate
for at least 30 hours per week in welfare-to-work activities,
whereas the minimum participation requirement for two-parent
families is 35 hours per week. After receiving aid for up to a
maximum of 24 months, adults without an exemption must meet
federal work requirements, with more restrictive employment
settings and allowable employment activities. If a CalWORKs
recipient who is not exempt from participation does not meet his
or her welfare-to-work requirements, the recipient is sanctioned
for noncompliance, and that recipient's portion of the family's
grant subtracted from the amount provided to the family to meet
basic needs.
CalWORKs time limits: Passage of the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996 (PRWORA), which
was the final piece of federal welfare reform legislation,
marked the end of the previous Aid to Families with Dependent
Children (AFDC) program and the beginning of the block-granted
TANF program, under which CalWORKs was established in California
state law. Among the numerous programmatic changes included
within the TANF program was a requirement that eligible parents
work or participate in work training or other activities that
lead to employment. The TANF program provides a great deal of
flexibility in how states implement their respective programs,
including the ability for states to establish more truncated
time limits than the 60-month lifetime limit on aid for adult
recipients authorized within it. As of 2011, California has
limited aid to adult CalWORKs recipients to a lifetime limit of
48 months.
AB 1742
Page 6
Earned Income Disregard (EID): While the maximum CalWORKs grant
amounts for high-cost counties and low-cost counties are $704
and $670, respectively, the average monthly grant amount across
the state is much lower at $497 per month, as it reflects a
reduction in the maximum grant due to other income in a
recipient family's household. By allowing a certain amount of
income to be retained and excluded from grant calculations, the
EID plays a major role in facilitating and encouraging paid
employment.
Among adults who are living with their families in poverty and
applying for CalWORKs assistance due to unemployment or
underemployment, the EID also facilitates working adults'
ability to work more hours and seek higher wages that don't
fully offset the grant amount they could otherwise receive
without any income. Under current law, the first $225 of an
adult recipient's gross earned income is disregarded from
CalWORKs grant calculations, then 50% of the remaining income is
disregarded, with the other 50% constituting the first portion
of what would otherwise be the recipient's grant amount based on
the maximum amount allowed. For example, a recipient with a
monthly income of $700 will have the first $225 disregarded,
leaving $475 from which another 50% will be disregarded. This
will leave $237.50 in income that will be counted when
calculating the family's grant amount; the grant amount in a
high-cost county would be $466.50 ($704 - $237.50), and the
grant in a low-cost county would be $432.50 ($670 - $237.50).
Need for this bill: During the Great Recession, the Legislature
enacted a number of cuts to the state's safety net programs,
including CalWORKs grant reductions and reductions in the EID.
The 2011 Human Services Budget Trailer Bill, SB 72 (Chapter 8,
Statutes of 2011), reduced the EID to $112 plus 50% of the
remaining earned income, causing more of a family's monthly
income to count against the maximum grant amount and thereby
reducing a family's total monthly income. A year later, when
AB 1742
Page 7
numerous other changes were enacted within the CalWORKs program,
the EID was restored to the first $225 and 50% of remaining
countable income. The author of this bill is seeking to
continue the trend of increasing the EID in order to facilitate
families' ability to increase earnings and build financial
stability as they participate in education programs and
transition to work.
SB 1041 (Committee on Budget and Fiscal Review) Chapter 47,
Statutes of 2012, which was the Budget Act trailer bill that
restored the EID, was also the trailer bill that created the
Welfare-to-Work 24-Month Time Clock, thereby requiring aided
adults, once the 24 months of increased flexibility in required
activities runs out, to meet federal work requirements, with
more restrictive employment settings and allowable employment
activities, in order to continue to receive aid and services.
While this bill will not abolish this requirement, it does seek
to provide adults expanded opportunities to transition to
employment and better support their families by increasing the
overall maximum time on CalWORKs aid to the 60 months allowed by
the federal TANF program.
The author states: "According to the Federal Supplemental
Poverty Measure, nearly a quarter of Californians live in
poverty. While California as a whole has recovered from the
Great Recession, the recovery has been uneven, and many
impoverished Californians continue to struggle. According to
the Public Policy Institute of California, the 2014
post-recession poverty rate in the state was 16.4%, a 4%
increase from the prerecession levels of 2007. Poverty,
particularly childhood poverty, results in a variety of negative
short- and long-term outcomes for families. It is in the
state's interest to pursue a multi-pronged approach to reduce
poverty amongst Californians. A restoration of the CalWORKs
lifetime limit to its pre-recession level and an EID increase
are necessary strategies to pursue in the fight against
poverty."
AB 1742
Page 8
REGISTERED SUPPORT / OPPOSITION:
Support
California Alternative Payment Program Association (CAPPA)
California Association of Food Banks
California Catholic Conference
California Food Policy Advocates (CFPA)
California Immigrant Policy Center (CIPC
Children's Defense Fund - California
Coalition of California Welfare Rights Organizations, Inc.
County Welfare Directors Association of CA (CWDA)
Courage Campaign
Ella Baker Center for Human Rights
Hunger Action Los Angeles
AB 1742
Page 9
National Association of Social Workers, CA Chapter (NASW-CA)
Saint Anthony's Foundations
Western Center on Law and Poverty - sponsor
Opposition
None on file.
Analysis Prepared by:Myesha Jackson/Daphne Hunt / HUM. S. /
(916) 319-2089